Some Gogoro Inc. (NASDAQ:GGR) Analysts Just Made A Major Cut To Next Year's Estimates

The latest analyst coverage could presage a bad day for Gogoro Inc. (NASDAQ:GGR), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Revenue and earnings per share (EPS) forecasts were both revised downwards, with the analysts seeing grey clouds on the horizon.

Following this downgrade, Gogoro's twin analysts are forecasting 2022 revenues to be US$395m, approximately in line with the last 12 months. Losses are supposed to balloon 173% to US$0.78 per share. However, before this estimates update, the consensus had been expecting revenues of US$478m and US$0.22 per share in losses. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a serious cut to their revenue forecasts while also expecting losses per share to increase.

See our latest analysis for Gogoro

The consensus price target fell 27% to US$9.00, implicitly signalling that lower earnings per share are a leading indicator for Gogoro's valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Gogoro, with the most bullish analyst valuing it at US$11.00 and the most bearish at US$7.00 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Gogoro's past performance and to peers in the same industry. We would highlight that sales are expected to reverse, with a forecast 1.7% annualised revenue decline to the end of 2022. That is a notable change from historical growth of 19% over the last year. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 22% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Gogoro is expected to lag the wider industry.

The Bottom Line

The most important thing to note from this downgrade is that the consensus increased its forecast losses this year, suggesting all may not be well at Gogoro. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of Gogoro.

Still, the long-term prospects of the business are much more relevant than next year's earnings. We have analyst estimates for Gogoro going out as far as 2024, and you can see them free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.